As the S&P 500 quietly approaches historical highs driven by strong tech sector leadership, ordinary investors find themselves collectively hesitant. Whether to buy US stocks and assets at this juncture depends on investors' risk preferences and allocation strategies. From institutional perspectives, supporting factors remain dominant: robust tech earnings resilience (UBS, HSBC, Barclays), marginal improvement in trade and policy uncertainty (Barclays, HSBC), and global capital reallocation favoring US dollar assets (Barclays, HSBC). These factors collectively form the foundation for "cautious optimism." HSBC raised its S&P 500 year-end 2025 target to 6,400 points, with a bull market scenario potentially reaching 7,000 points, providing directional guidance for long-term investors.

However, risks cannot be ignored. Earnings divergence requires investors to avoid sectors severely impacted by tariffs (energy, certain consumer sectors) while focusing on technology (especially AI applications) and financial sectors. The lag effect of tariffs reminds investors to monitor profit margin changes in third-quarter earnings reports. Valuation concerns mean investors should not blindly chase highs but can gradually position during market corrections.

For ordinary investors, rather than debating "whether to buy," it's better to consider "how to buy": selectively choosing leading companies within tech stocks that exceed earnings expectations (such as Meta, Amazon, and other major TECH+ companies), combined with financial stocks benefiting from policy easing, while controlling position sizes to handle potential volatility. As the market's complex situation demonstrates, there's no absolute "should or shouldn't," only what's "appropriate or not" matching one's risk tolerance.

**I. Market Status: Tech-Led Structural Rally**

The current S&P 500 rise is not broad-based but a structural rally dominated by the technology sector. UBS's Q2 2025 US equity earnings brief released on August 6, 2025, shows that as of August 6, 76.9% of S&P 500 market cap had reported second-quarter earnings, with overall earnings per share (EPS) growing 10.2% year-over-year, far exceeding initial 5% expectations. The TECH+ sector performed most impressively with 24.6% YoY EPS growth, while the energy sector declined 20.4%, forming a stark contrast.

More notably, the six major TECH+ companies (Google, Meta, Microsoft, Apple, Amazon, NVIDIA) achieved 27.5% YoY EPS growth overall, far surpassing the 5.9% growth rate of the rest of the market. Specifically, Meta's actual EPS growth reached 38.4% (expected 15.0%), and Amazon's actual growth was 33.3% (expected 5.3%). This "top student" level performance became the core driving force pushing the S&P 500 near historical highs.

From a valuation perspective, Barclays' latest view indicates that large-cap tech stocks' historical premium relative to the S&P 500 is in the bottom quartile range, meaning current valuations still have upside potential. Although the S&P 500 (excluding large-cap tech) has closed the return gap with European markets this year, US large-cap valuations remain in the declining portion of the top quartile of 10-year observation data, without severe deviation.

**II. Three Core Supporting Factors for Buying**

**(A) Corporate Earnings Resilience: Dual Engine of Tech and Finance**

Corporate earnings are the core foundation supporting stock prices. HSBC Global Investment Research's August 6, 2025 report shows S&P 500 second-quarter EPS growth reached 10%, with over two-thirds of companies beating expectations. Over 90% of tech sector stocks exceeded EPS expectations, and financial sector brokerage stocks also far exceeded expectations.

This earnings resilience is not fleeting. UBS data shows corporate earnings overall exceeded expectations by 8.1% this quarter, with 74% of companies meeting targets, while the historical average beat from Q2 2020 to Q2 2024 was only 4.9%. Current earnings performance significantly outperforms most past periods.

Tech sector earnings growth is particularly sustainable. HSBC indicates tech sector earnings growth is expected to reach around 20% in 2025, with earnings revision ratios trending upward. Microsoft's AI business continues accelerating, Meta was upgraded to "Buy" rating, with high return on equity (36%, 15 percentage points above market average), strong balance sheet, and continued capital expenditure further expanding competitive advantages.

Barclays also mentioned that Google, Meta, and Microsoft's Q2 2025 results indicate that large-cap tech stocks, as the main engine of US market profitability, maintain unaffected growth momentum.

**(B) Policy and Trade Environment: Marginal Improvement in Uncertainty**

Relief from trade uncertainty provides important support for US assets. Barclays believes the US has emerged from "over-reliance on large-cap tech stocks and trade-related concerns." Although tariff negotiations persist, a series of agreements reached between the US government and global trade partners signals that trade uncertainty has passed its peak.

This judgment is confirmed in foreign exchange markets: the US Dollar Index (DXY) stabilized after record selling in the first half of 2025, with narrowed declines against major G10 currencies over the past month, especially against the British pound and Japanese yen.

While the Fed's policy pivot timing remains debatable, the baseline scenario leans toward moderation. HSBC's baseline scenario assumes economic slowdown in the second half of 2025 will prompt Fed rate cuts (25 basis points each in September and December), providing liquidity support to markets.

**(C) Global Capital Reallocation: Rising Appeal of US Dollar Assets**

Global capital flows are re-shifting toward US assets. Barclays observes that UK, Chinese, and Japanese equity CTA long positions are near historical extremes, while US equity exposure in sideways/upward markets could increase further, with room for expansion in volatility control and risk parity strategies.

In foreign exchange markets, HSBC FX strategists believe that as the US reaches trade agreements with Japan and the EU, EUR/USD may gradually fall to 1.13 levels, with the dollar bottoming and recovering potentially continuing, enhancing US dollar assets' appeal to global capital.

From positioning structure, both retail and institutional investors have room to increase allocations. Barclays mentioned that retail buying has been consistently sustained, while hedge funds/leveraged investors (HF/LO) still have room to increase participation. This capital reallocation trend resonates with expectations of "globally largest profit margin upside potential" for the US, further strengthening the allocation value of US assets.

**III. Sources of Hesitation: Three Major Risks Cannot Be Ignored**

**(A) Widening Corporate Earnings Divergence, Non-Tech Sectors Under Pressure**

Structural divergence in earnings growth is one of the core reasons for investor hesitation. UBS data shows S&P 500 sector EPS growth differences are extremely significant: TECH+ sector grew 24.6%, while energy declined 20.4%, cyclical sectors (excluding energy) fell 0.3%, and non-cyclical sectors only grew 1.2%.

HSBC also points out that S&P 500 "other sectors" (non-tech/non-seven tech giants) earnings growth and momentum are slowing, with tariff-affected consumer staples and discretionary sectors facing negative earnings revisions and weak guidance.

This divergence means buying "US assets" is not a simple overall decision but requires precise stock selection.

**(B) Lag Effect of Tariff Impact, Third Quarter May Be Critical**

Tariff impacts on corporate profits may manifest with a lag. HSBC reminds that the US current effective tariff rate is about 18%, far above the 2.5% at year-start. Although second-quarter profit margins remained stable (13.2%), as inventory decreases and relocation work progresses, the third quarter may face more significant impact.

In a bear market scenario, tariffs could cause corporate profit declines and inflation increases, limiting Fed rate cuts and causing the S&P 500 to fall to 5,700 points. This potential risk makes investors doubt the sustainability of current valuations.

**(C) Valuation and Historical High Psychological Battle**

Valuation concerns as the S&P 500 approaches historical highs cannot be ignored. While Barclays believes US large-cap valuations haven't severely deviated from reasonable ranges, HSBC points out that non-tech, non-"seven tech giants" sectors have a forward 12-month P/E of 18.5x, above the five-year average of 17.3x, with limited re-rating space.

For ordinary investors, the fear psychology of "buying at the top" is amplified—while tech stocks have earnings support, the 29.6x P/E ratio (HSBC data) is no longer cheap. Should the AI boom fade or policy pivots fall short of expectations, valuation correction risks will rise.